U.O.I. vs HINDUSTAN DEVELOPMENT CORPN. .

The Supreme Court held that the Government has wide powers in regulating contracts and must act in accordance with principles of reasonableness and non-arbitrariness as mandated by Article 14 of the Constitution. The Court affirmed that the Railway Board's decision to adopt dual pricing in awarding contracts was bonafide and aimed at controlling unfair trade practices, thus not violating the principles of legitimate expectation. The judgment reinforced that the Government can reject the lowest tender if justified by policy considerations, thereby upholding the validity of the tender process under scrutiny.